One Year On, Anson House Sold Again At 73% Profit

Source : The Business Times, December 20, 2007

It's December and Anson House is changing hands again - for a much heftier price.

Hot property: GE Real Estate has sold Anson House to a private property fund managed by Australia's Macquarie Bank for $129.5m. This works out to $1,701 psf of the building's net lettable area.

GE Real Estate has sold it to a private property fund managed by Australia's Macquarie Bank for $129.5 million - about 73 per cent more than what it paid for the 13-storey office block last December.

The price paid by the Macquarie-managed fund works out to $1,701 per square foot of the building's existing net lettable area (NLA) of 76,127 sq ft. This is slightly higher than the 72,122 sq ft NLA reported earlier as the building's efficiency has been improved - for instance, by converting some of the common areas to lettable space.

The latest sale was brokered by Jones Lang LaSalle's Asia Capital Markets Group and shows that office blocks continue to be traded by foreign institutional investors.

Based on current leases in the building, the $129.5 million reflects an initial net yield of about 3.6 per cent, but this is set to increase with about half of the building's NLA coming up for lease renewals by end-2009.

The 13-storey building, completed nine years ago, includes about 5,300 sq ft NLA of retail space on the ground floor. Anson House also has 98 carpark lots. It stands on a site with a remaining lease of about 89 years. Last year's sale of the building to GE Real Estate was by a company owned by former Singapore Land chairman SP Tao and his Indonesian partner, Mackmoor Pte Ltd.

Nearby, 78 Shenton Way was sold recently for $650.78 million to Germany's Commerz Grundbesitz Investmentgesellschaft (CGI) group. This works out to $1,857 psf based on a total NLA of about 350,000 sq ft, inclusive of six levels of new offices that are being built above the carpark podium by the seller, a joint venture between Credit Suisse and CLSA funds.

The deal is said to include income support as well as a return on the new office extension while it is being built amounting to about $16 million in total to be paid by the seller to the buyer.

Excluding this sum, the effective price being paid by CGI works out to about $635 million or around $1,814 psf. The property is on a site with a balance lease term of about 75 years.